An influx of retail investors in the derivatives market is driving new trading platforms and specially tailored contracts. Jonathan Watkins looks at how exchanges and online platforms are tapping into and fuelling this growing demand.

For nearly a decade, the Korea Exchange was the most actively traded derivatives exchange in the world, driven almost solely by retail investors using its KOSPI index options.

The small contracts hit nearly 300m trades a month at their peak, before a politically-fuelled mandate required the exchange to increase the multiplier five-fold, forcing those retail investors out of the market.

While that kind of popularity could be hard to mirror in the rest of the world, KX showed the potential harnessed by retail investors if an exchange gets the formula right.?